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RBC Raises Price Target on Apple Shortly After Dreaming About Benefits of a Merger With Disney

infinitejest said:
Before you call it nonsense, you should actually start giving specific reasons why it wouldn't be an opportunity for Apple and Disney, instead of using examples from the past.
Also, your example shows a technology company acquiring a technology company - whole different scenario.
Apple could benefit from Disney's content and Disney could benefit from Apple's distribution (and devices).

So far, your only point why it wouldn't work is that it hasn't worked for some other companies before. That's what I call nonsense.
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That's actually quite reasonable (bolded portions). A tech company buying out its competition is as you mention, typically a bad scenario. In this scenario, Apple's management team doesn't have a lot of experience in this area. They usually integrate smaller companies where the risk is considerably lower. I don't know that Apple's management team would know what to do with it.

Disney has been performing well over the past several years, especially with acquisitions like Marvel which allowed them to put out a number of films based on characters from various comics along with other IP. I haven't kept up with their entire portfolio. You can see their net income here without sifting through a 10k filing. Their market cap is shown around 180b, but any signs of acquisition are likely to put a 20% premium on that. Their net for 2016 was around 15B, and Apple may not want to directly operate some of the legacy infrastructure, such as their parks.

Given those numbers, they would require enormous growth to really justify the purchase. Disney's already quite good at monetizing their own IP, and they have worked with Apple in the past. I'm highly skeptical that they could come up with a business plan that has a high likelihood of justifying the purchase in that price range.
 
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mrcobra92 said:
Hmmmm, not sure how I feel about this idea. I'm a HUGE Disney parks fan (I frequent many Disneyland forums much like Macrumors but for Disney parks news/rumors) and could see some benifit from some more cash flow to the parks division. DL desperately needs a 3rd gate and WDW needs a complete overhaul of Epcot which could be cool with Jony Ives visions. Still don't know what to think overall though.

This is what the Disney parks fans think of the idea.

https://discuss.micechat.com/forum/...ussion/disneyland-resort/8504206-apple-disney
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Thanks for sharing. I could see what Apple got out of acquiring Disney, but I couldn't see what Disney would get out of being acquired. I suppose you've answered the question about what they might get.

Except...
#1 - Apple would have to spend all their money on acquiring Disney (where does that money go anyways? Never really understood it... if the money goes to Disney and you're acquiring Disney... don't you basically keep your money? Or does all the money go straight to the shareholders instead of to the company? I guess that'd make more sense...)
#2 - If Disney isn't funding the parks adequately themselves, why would Apple fund them better? The parks would be a distraction for Apple...

Although I can see it now... Apple stores in Disney parks...
 
ArtOfWarfare said:
Thanks for sharing. I could see what Apple got out of acquiring Disney, but I couldn't see what Disney would get out of being acquired. I suppose you've answered the question about what they might get.

Except...
#1 - Apple would have to spend all their money on acquiring Disney (where does that money go anyways? Never really understood it... if the money goes to Disney and you're acquiring Disney... don't you basically keep your money? Or does all the money go straight to the shareholders instead of to the company? I guess that'd make more sense...)
#2 - If Disney isn't funding the parks adequately themselves, why would Apple fund them better? The parks would be a distraction for Apple...

Although I can see it now... Apple stores in Disney parks...
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#1 Yeah I really don't know how that would work either.

#2 The parks become a tech demo of future Apple Products especially in areas like Tomorrowland. This was designed to be the future of America TODAY. Right now it's more what American was supposed to look like in 2000 circa 1985 with a hint of random Star Wars. Think of what it could be if Apple used it as a showcase for what future technology could be. This goes quadruple for Epcot center. Similar concept, a utopian city of futuristic ideas. Again, a great place to show off Apple's new and upcoming tech. Sure the parks could be looked upon as a distraction, but I think it could be a great advertising revenue. Plus it could really help the parks as a whole.
 
Well, without E. Cue on board, overall Apple stock value & corporate focus must increase significantly.
Nice opportunity for a great cleanup - to get rid of all the overhead.
Make him depart to form Apple Leasure (together with Apple Music staff, Iovine, DJ's and all spurious rappers/gangsta's around them)
Kick them out while Beats 1 jams their headphones - they wouldn't even notice the difference.
When freed from the Scene, Apple may become a product company again instead of a "Bore More" money collecting movement.
 
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I don't know much of this type of thing, but this seems to me he's putting out big names to pump and dump the stock. I could be way off base.
 
IJ Reilly said:
The current market cap of DIS is $180B and companies are rarely acquired without a significant premium paid over current market value, so what is being talked about here would soak up virtually every dollar Apple has salted away both in the U.S. and abroad. For some reason this wasn't seen to be important enough to mention, but it is the single most important consideration. Even if some theory can be spun to support the idea that Apple would get something out of a merger, the second important question is why Disney would be interested in one.
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That's not how it works. AAPL could use reserve shares. It could issue bonds. There are more options than just dropping cashola.
 
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pacalis said:
Acquisition of gigantic companies works if the companies are in the same business lines with similar cultures and strategies. If they are different business lines, it is a disaster.

Imagine, Jony Ive redesigns all of Disney's theme parks.

This idea is soooooo stupid.
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Yup, put on just 1kg and you would no longer fit in the thin seats :)
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infinitejest said:
Before you call it nonsense, you should actually start giving specific reasons why it wouldn't be an opportunity for Apple and Disney, instead of using examples from the past.
Also, your example shows a technology company acquiring a technology company - whole different scenario.
Apple could benefit from Disney's content and Disney could benefit from Apple's distribution (and devices).

So far, your only point why it wouldn't work is that it hasn't worked for some other companies before. That's what I call nonsense.
Click to expand...

Apple is closed system and Disney needs an open system... i.e. more than just Apple for distribution.
 
what is the point of bringing Disney into a conversation as a possible merger? Just stupid. There's no way in heck a merger of this type would EVER happen. There's ZERO reason for it to happen, so to even put together a lengthy "analysis" on the benefits is a stupid, ridiculous exercise that's done just to generate click bait for analyst. Apple/Columbia or Apple/Paramount or Apple/WB would make more sense since those studios are actually in trouble and quietly looking for suitors. Last I checked Disney has ZERO reason to be interested in merging with anyone else. All of their divisions are hugely successful and have been for over a decade and now they have a license to print money with LucasFilm. This is just some analyst talking out of his ass.
 
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IJ Reilly said:
The current market cap of DIS is $180B and companies are rarely acquired without a significant premium paid over current market value, so what is being talked about here would soak up virtually every dollar Apple has salted away both in the U.S. and abroad. For some reason this wasn't seen to be important enough to mention, but it is the single most important consideration. Even if some theory can be spun to support the idea that Apple would get something out of a merger, the second important question is why Disney would be interested in one.
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According to other reporting, Mr. Daryanani suggested a 40% premium on top of (what was then) DIS's price. That would mean about $250 billion.

Considering a repatriation tax of 10% and accounting for Disney's debt, an all cash deal (which is what was suggested) would leave Apple with something like $120 billion in debt net of cash.
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Ries said:
4% is not a large portion (64million shares).

Ohhh look, is that a Jedi with a Apple logo saber?
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As of the end of 2016 she held 4.0% in her name and controlled another 2.5% through the Laurene Powell Jobs Trust.

She has, apparently, been slowly selling (or giving away) her DIS position for a few years.
 
IJ Reilly said:
The current market cap of DIS is $180B and companies are rarely acquired without a significant premium paid over current market value, so what is being talked about here would soak up virtually every dollar Apple has salted away both in the U.S. and abroad. For some reason this wasn't seen to be important enough to mention, but it is the single most important consideration. Even if some theory can be spun to support the idea that Apple would get something out of a merger, the second important question is why Disney would be interested in one.
Click to expand...

Apple would just use Apple shares in most large acquisitions of another company. It was a silly article to suggest that Apple would just spend all its cash or even a large portion of it on a merger. And yeah, in order to get the Disney shareholders interested, there would have to be a major premium. So Apple would probably need to issue $250 billion its own shares to accomplish this. Or do some combination of cash and shares. But they'd never blow the entire war chest on an acquisition.
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drumcat said:
That's not how it works. AAPL could use reserve shares. It could issue bonds. There are more options than just dropping cashola.
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Yep, but no need to complicate it with reserve shares. They could just issue new shares. If the deal is considered a good one for Apple by the market then it won't be considered dilutive.

But really RBC's idea is that Apple is waisting its time sitting on so much cash. So their idea was to have a heavy cash component. Silly idea.

However I do think that we will get a repatriation tax holiday in the U.S. either this year or next year. (Republicans need a "win" and this is an easy one.) I'm hoping Apple does bring back tons of money and then just does the largest dividend of all time.
 
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So—in theory—how much would it cost to buy Disney? Asking for a friend.
 
drumcat said:
That's not how it works. AAPL could use reserve shares. It could issue bonds. There are more options than just dropping cashola.
Click to expand...

Other reporting suggests that Mr. Daryanani was speculating about an all (or, at least, mostly) cash deal. And his own comments - e.g. those about accretion - imply the same.
 
ArtOfWarfare said:
Thanks for sharing. I could see what Apple got out of acquiring Disney, but I couldn't see what Disney would get out of being acquired. I suppose you've answered the question about what they might get.

Except...
#1 - Apple would have to spend all their money on acquiring Disney (where does that money go anyways? Never really understood it... if the money goes to Disney and you're acquiring Disney... don't you basically keep your money? Or does all the money go straight to the shareholders instead of to the company? I guess that'd make more sense...)
#2 - If Disney isn't funding the parks adequately themselves, why would Apple fund them better? The parks would be a distraction for Apple...

Although I can see it now... Apple stores in Disney parks...
Click to expand...

Presumably what Disney (i.e. DIS owners) would get out of the deal would be a significant premium on top of the current stock price.

To answer #1... in a cash deal, Disney shareholders would get the cash.
 
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